The rental industry is a billion-dollar industry in the United States. Millions of individuals seek and secure rental properties each year as their primary residence. Most of these individuals pay security deposits as part of the rental process.
Renting a property means entering a binding legal agreement. The landlord and tenant must uphold the terms of that agreement for the life of the rental period. Violations of that agreement can result in the loss of part or all of the security deposit fee.
Do you know the situations where tenants must relinquish security deposits? North Carolina security deposit laws stipulate that a landlord may be entitled to keep the security deposit in certain circumstances.
Read to know under what circumstances a tenant should not expect a security deposit return.
1. Leaving Before the End of the Lease
If the rental agreement includes a fixed-term tenancy, the tenant cannot violate that timeframe. A landlord can keep all or part of the security deposit to cover costs associated with the breach of contract.
2. Not Paying Rent
Another contractual obligation on behalf of the tenant is timely payment in full for the amount signed for in the lease agreement. Landlords may keep security deposit funds to cover any shortages or nonpayment from tenants.
3. Damage to the Property
Landlords expect a certain amount of wear and tear during a tenancy. There are some cases where minor damage occurs, and in these cases, a tenant can expect a security deposit refund at the end of the agreement.
The following are examples of normal wear and tear:
- Small holes from hanging pictures
- Minor spot stains on the carpet
- Dirty floor tile or shower tile grout
- Loose cabinet handles
- Faded fabrics
- Dents in walls from doorhandles
However, if the property owner must carry out significant repairs to return the property to its condition when the renter first took occupancy, the tenant can expect to forfeit the deposit.
The following are examples of excessive damage:
- Large holes in walls
- Water damage to wood or drywall
- Broken windows
- Clogged drains or toilets due to misuse
- Holes or burn marks in carpet or curtains
- Broken bathroom fixtures or appliances
Repair and replacement of these items can result in a monetary burden to the owner, and the security deposit protects them from loss.
4. Cleaning Costs
Basic cleaning of carpets and other surfaces typical of turning over a property would qualify as normal and not require monetary compensation. Costs incurred for deep cleaning excessive filth, garbage pick up, or furniture and large item removal could be cause for the loss of a security deposit.
5. Missed Utility Payments
When utility payments are part of a lease agreement, missed payments can cause the landlord to keep the security deposit. Utility companies require payment for continued services and may charge a late penalty or service reactivation fee. Landlords can use security deposit funds to cover these payments.
Understand the Security Deposit
Security deposits protect the landlord in the case of damages and as an incentive for the tenant to act responsibly.
For help understanding more about security deposits and any other needs as a tenant or landlord, contact us today to find out about our services.